Ruthless efficiency

Efficiency, for lack of a better word, is good. Efficiency allows a business to optimize resources. Optimizing resources leads to lower costs and higher profits, which are the foundations of a market economy. Therefore, pursuing efficiency should be a goal of business.

Pursuing efficiency is all well and good until the drive to optimize crosses a line. That line where the benefits of efficiency are no longer distributed equally, resulting in higher levels of inequality between the have’s and have-not’s. At that point, we’ve entered the realm of ‘ruthless efficiency.’ The point where there is a lack of empathy and compassion regarding the effects optimizing has on others.

An old school example

One of my favorite anecdotes is how banks have pursued maximizing profits. When I was fresh out of college, with little money, the bank charged me for every service. And when I say every thing, I mean every thing.

Want an account? There’s a fee. Want checks? There’s a fee. Need to use the ATM? There’s a fee.

You get the point. When you have no money, the bank considers you a nuisance. They want to charge you for every last item.

Fast forward 10 years, and I had managed to save up some money. I achieved that threshold where I was considered a profitable customer. All of those previous fees were erased. How ironic. When I had no money, the bank charged me for everything. When I have money, everything is free.

While it optimizes the profits for the bank, the policy has no empathy or compassion for those it affects. It’s the ones without money that need the help. Without it, they can’t afford to have an account, which is an important part of being able to function in modern society.

Is the policy efficient for the bank? Yes. Is it ruthlessly efficient? Certainly.

Another old school example: bankruptcy

I had no idea how complex the bankruptcy system was until I saw this short TED video by Rohan Pavuluri. He is co-founder of Upsolve, a company that is trying to help people who need access to bankruptcy the most, those with no money.

Think about what he says. The person who would benefit most from bankruptcy proceedings likely has no money. But the courts typically want money, $1,500 in his example, to file the paperwork. Where does a person with no money, no savings, get the money to file bankruptcy, let alone pay for the cost of a lawyer to help them navigate the arcane and obtusely written statutes and documents.

Not only does it apply to the bankruptcy system, it also applies to the justice system as a whole. The system has been made efficient for the have’s, but it’s been made ruthlessly efficient for the have-not’s.

Where we’re headed

Before computers, software, machine learning, and artificially intelligent algorithms, efficiency was more art than science. Managers would use pencil and paper to track metrics using formulas that changed slowly over time, if ever. Some managers achieved efficiency through experience. They just knew what felt right and could use prior learning to optimize based on current conditions. They could see the results and impacts of their actions and adjust if it was taking a toll on employees and customers. While some managers may have been ruthless, most had some level of compassion and empathy for their fellow humans.

With technology and software, efficiency is reaching new levels. Instead of using judgment, businesses have algorithms that operate on data in real-time, adjusting almost instantaneously when conditions change.

Applying for a loan? Computers crunch data on your profile, including your credit score to determine whether you qualify and the interest rate you pay, regardless of personal factors. One missed payment or one identity theft episode can significantly impact your ability to buy a car, buy a house, rent an apartment, or get any type of credit.

Working as a contractor in the ‘gig’ economy? Apps are constantly monitoring your performance. Miss one delivery, take one too many bathroom breaks, and you are put on notice, or worse yet, fired immediately regardless of the reasons.

There are more examples regarding insurance, housing prices, review and rating systems. The list goes on with algorithms being developed to optimize for efficiency based on data.

The problem is that algorithms operate based on data and goals. They will do whatever it takes to drive the results to meet those goals. There is no compassion and no empathy, only ruthless efficiency. Algorithms don’t care how it affects people.

Where do we go from here?

When our desire to wring every last bit of inefficiency out of society begins to affect our humanity, when it widens the gap between have’s and have not’s, when people no longer recognize the reduction of empathy and compassion algorithms enforce and see it as “other” people’s problems, we’ve entered the area of ruthless efficiency.

So what’s the answer? Honestly, I don’t know.

I’m not saying we shouldn’t optimize, that we shouldn’t be efficient with limited resources. Efficiency has its place. It’s important to optimize resources. Software algorithms and technology are important. However, when these systems lack empathy, lack compassion, and fail to recognize humanity, they need to be questioned.

Somehow, we need to become more aware of how the drive to optimize every aspect of business and every aspect of our life impacts those around us. Algorithms and systems need to have built-in abilities to be overridden with input from actual humans, humans who have empathy and compassion.

It will be hard. In some places we’re far down the path of ruthless efficiency, maybe too far. Turning back will be hard, but turn back we must. It will take courage, which starts at the individual level, and grows to the societal level. It’s on all of us, especially those who ‘have’ to recognize the widening gap and to the right thing, to look out for our fellow humans, especially those who ‘have-not.’

h/t to Seth Godin, one of my favorite bloggers, for sharing his thoughts on the subject and pointing me to the TED talk videos by Rohan Pavuluri and Bryan Stevenson.